Correlation Between PennantPark Floating and Generation Capital
Can any of the company-specific risk be diversified away by investing in both PennantPark Floating and Generation Capital at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining PennantPark Floating and Generation Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Floating Rate and Generation Capital, you can compare the effects of market volatilities on PennantPark Floating and Generation Capital and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in PennantPark Floating with a short position of Generation Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Floating and Generation Capital.
Diversification Opportunities for PennantPark Floating and Generation Capital
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between PennantPark and Generation is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Floating Rate and Generation Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generation Capital and PennantPark Floating is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on PennantPark Floating Rate are associated (or correlated) with Generation Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generation Capital has no effect on the direction of PennantPark Floating i.e., PennantPark Floating and Generation Capital go up and down completely randomly.
Pair Corralation between PennantPark Floating and Generation Capital
Assuming the 90 days trading horizon PennantPark Floating Rate is expected to generate 3.86 times more return on investment than Generation Capital. However, PennantPark Floating is 3.86 times more volatile than Generation Capital. It trades about 0.07 of its potential returns per unit of risk. Generation Capital is currently generating about 0.03 per unit of risk. If you would invest 60,893 in PennantPark Floating Rate on August 25, 2024 and sell it today you would lose (56,720) from holding PennantPark Floating Rate or give up 93.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.42% |
| Values | Daily Returns |
PennantPark Floating Rate vs. Generation Capital
Performance |
| Timeline |
| PennantPark Floating Rate |
| Generation Capital |
PennantPark Floating and Generation Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Floating and Generation Capital
The main advantage of trading using opposite PennantPark Floating and Generation Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Floating position performs unexpectedly, Generation Capital can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Generation Capital will offset losses from the drop in Generation Capital's long position.| PennantPark Floating vs. Altshuler Shaham Financial | PennantPark Floating vs. Generation Capital | PennantPark Floating vs. Meitav Dash Investments | PennantPark Floating vs. IBI Inv House |
| Generation Capital vs. EN Shoham Business | Generation Capital vs. Mivtach Shamir | Generation Capital vs. Enlight Renewable Energy | Generation Capital vs. Rani Zim Shopping |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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